Sales growth at U.S. retailers could slow to 1 percent in March, half the pace previously projected by a trade group, after sales grew at the lowest rate in five weeks.
The reduced forecast released Tuesday by the International Council of Shopping Centers and UBS Securities LLC was new evidence that the U.S. economic slowdown is deepening as falling home values and rising prices for food and fuel damp consumer demand.
Sales at stores open more than a year increased 1.6 percent last week from a year earlier, the slowest since the first week of February.
“We’re looking at a real retail recession at least until the holiday season in 2008, and possibly into 2009,” said Burt Flickinger, managing director of Strategic Resource Group.
Employers eliminated 63,000 jobs last month after cutting 22,000 positions in January, the Labor Department said last week. Gasoline prices rose to a record nationwide average Tuesday, according to AAA and the Oil Price Information Service. Mortgage foreclosures reached an all-time high in the final three months of 2007, the Mortgage Bankers Association said in a report March 6.
“When you have this kind of confidence collapse, people will increase their savings the old-fashioned way: out of income,” said Howard Davidowitz, chairman of Davidowitz & Associates in New York. “That means a real dramatic collapse in spending.”
Same-store sales increased 1.9 percent in February, the ICSC said last week. The group gathers data from as many as 60 retail chains to compile its figures.
Same-store sales, or sales made at stores open at least a year, are considered a key indicator of a retailer’s performance.
The Johnson Redbook index, another measure of retail transactions, said same-store sales last week rose 1 percent from a year earlier. The index tracks purchases at retailers representing about 9,000 U.S. locations
